1 Chinese banks top international syndication volumes in Asia Pacific Survey shows Chinese banks’ lending volumes amounted to 25% of region’s market share 14 August 2014 – Chinese banks were the most active in international syndication in 2013 compared to other financial institutions in the Asia Pacific region, according to a survey commissioned by Misys and conducted by The Asian Banker. Asia Pacific (excluding Japan) witnessed one of the best years in the syndicated lending business in 2013 with a volume of USD 462 billion, an increase of 51% year-on-year. China was the biggest contributor with a volume of USD 117 billion from 320 deals, a huge increase of 99% year-on-year and a 25% market share of the region’s total volumes. Corporate lending was led by the ‘Big Four Banks’, namely Bank of China which was the biggest regional player accounting for 8% of Asia Pacific volumes, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China. Chinese banks have not only shown their dominance in the syndicated lending business in China but have also been an active player across the region with four of the top mandate arrangers in the region coming from China. Even in a developed economy like Australia, Chinese banks have been actively participating in syndicated deals and have proved to be competition to the top four Australian banks. Hong Kong saw an increase of 86% largely due to offshore lending to Chinese firms, which contributed 70% of the Hong Kong volumes. Emerging markets such as Thailand, Malaysia, Philippines, Indonesia and Vietnam also saw an increase of 90% in volumes. With Japan included, the Asia Pacific volume was USD 738 billion, accounting for 18% of global volumes and just 1% less than European volumes. This is a big jump in a business once dominated by the US and Europe. Amit Chopra, Syndicated and Commercial Lending Specialist, Misys, commented, “China has been one of the few countries where syndicated lending has continued to grow through
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Chinese banks top international syndication volumes in
Asia Pacific
Survey shows Chinese banks’ lending volumes amounted to 25% of region’s market share
14 August 2014 – Chinese banks were the most active in international syndication in 2013
compared to other financial institutions in the Asia Pacific region, according to a survey
commissioned by Misys and conducted by The Asian Banker.
Asia Pacific (excluding Japan) witnessed one of the best years in the syndicated lending
business in 2013 with a volume of USD 462 billion, an increase of 51% year-on-year. China
was the biggest contributor with a volume of USD 117 billion from 320 deals, a huge increase
of 99% year-on-year and a 25% market share of the region’s total volumes. Corporate
lending was led by the ‘Big Four Banks’, namely Bank of China which was the biggest
regional player accounting for 8% of Asia Pacific volumes, Industrial and Commercial Bank
of China, China Construction Bank and Agricultural Bank of China.
Chinese banks have not only shown their dominance in the syndicated lending business in
China but have also been an active player across the region with four of the top mandate
arrangers in the region coming from China. Even in a developed economy like Australia,
Chinese banks have been actively participating in syndicated deals and have proved to be
competition to the top four Australian banks.
Hong Kong saw an increase of 86% largely due to offshore lending to Chinese firms, which
contributed 70% of the Hong Kong volumes. Emerging markets such as Thailand, Malaysia,
Philippines, Indonesia and Vietnam also saw an increase of 90% in volumes. With Japan
included, the Asia Pacific volume was USD 738 billion, accounting for 18% of global volumes
and just 1% less than European volumes. This is a big jump in a business once dominated
by the US and Europe.
Amit Chopra, Syndicated and Commercial Lending Specialist, Misys, commented, “China
has been one of the few countries where syndicated lending has continued to grow through
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the global crisis; high liquidity in the banking sector is one of the reasons for this growth. With
a non-performing loan percentage as low as 0.08%, this form of lending has been very well
accepted by the Chinese banking sector as it also allows banks to diversify lenders’ risk
without compromising the quality of credit.”
Domestic syndicated lending volumes in China also proved strong in 2013, amounting to
USD 724 billion, a 21% increase from the previous year. China Development Bank led with
27% of the domestic market share, followed by Industrial & Commercial Bank of China at
14%.
As competition increases within the corporate lending and loan syndication landscape in
China’s banking sector, banks will need to compete on better products and services to draw
and retain clients. Financial institutions across the globe have embraced technology to grow
their business in challenging environments as currently faced by banks in China.
Misys has provided loan servicing solutions to banks in Asia for 30 years. “Our loan servicing
solution Misys FusionBanking Loan IQ has helped banks in Asia to enable revenue growth
and increase operational efficiencies while reducing overall risk,” Chopra continued. “With 16
out of the top 25 international banks using the solution globally, including in Asia, to manage
complex lending, Misys FusionBanking Loan IQ has been well recognised as a leader in this
business. Our Asian clients have seen an increase of more than 100% in their syndicated
lending business after implementing the solution.”